December
24, 2003

Village files legal complaint against business over loan

The Village has filed
a complaint against the owners of the Gypsy Café, claiming that
the restaurant defaulted on its loan with the Village.

The complaint, filed
in Greene County Common Pleas Court on Dec. 15, claims that the restaurant
and its owners, Locksley and Guy Orr, violated the terms of their development
agreement and promissory note, which the Orrs entered into when they borrowed
$50,000 from the Village to start the Gypsy Café. The funds came
from the Village’s Economic Development Revolving Loan Fund. The
Village and the Orrs agreed to the loan’s terms around July 2000,
according to the suit and documents included in court documents.

The complaint alleges
that the Gypsy Café currently owes the Village over $49,660 on
the loan. The Orrs have made over $6,000 in loan payments to the Village,
but have also accumulated more than $5,700 in interest, the complaint
states.

The Village has asked
the court to order Gypsy Café to repay the Village its outstanding
loan balance.

The Orrs and James
M. Hill, the Beavercreek attorney representing the Village in this matter,
gave strikingly different versions of the situation.

On Monday in separate
interviews, Locksley and Guy Orr expressed surprise at the Village’s
move. Guy said that the Orrs thought that they and the Village had a verbal
agreement to resolve the issue.

The Orrs had proposed
that they repay the loan by setting up an account into which they would
directly deposit funds from Guy Orr’s salary, which he earns from
a second job. The Orrs said that Locksley Orr had set up the account and
had put money into it. “It was at my own initiative, not theirs,”
she said of the Village.

Locksley Orr said
that she had paid back some of the loan since they made their proposal.
“We’ve made an effort to pay back the loan,” she said.
Guy Orr said that they are “trying to deal with our responsibilities.”

“We’re
not jumping ship,” he said.

Hill said that he
did not know the Orrs set up the account and that the “Village is
not accepting funds from Guy’s paycheck.”

The attorney also
said that he and the Orrs never had an agreement, though he did say that
they had discussed the Orrs’ payment proposal. He said that the
Village indicated that it wanted a “forbearance agreement,”
or an alternative agreement with the Orrs.

However, Hill said
that the Village was not able to come up with an agreement with the Orrs
stating how they would bring their loan payments up to date and continue
future payments. “We were generally proposing an alternative payment
plan that would fold most of the unpaid interest into a payment plan,”
Hill said.

But that effort broke
down, Hill said, when “the Orrs stopped communicating with us in
terms of reaching an agreement” at the end of November. At that
point, he said, “there was simply nothing else to do” but
file the complaint.

Guy Orr said that
he and Locksley have been communicating with Hill, but Locksley Orr said
that they did not open the most recent correspondence from Hill because
Guy Orr was ill. That correspondence, she said, contained a new proposal
from Hill.

Council president
Tony Arnett declined to comment on the complaint.

Village Manager Rob
Hillard said that the Village “really tried to resolve this issue.”

“This was not
what we wanted,” he said of the complaint. “However, we do
have a fiduciary responsibility and we are holding it through our actions.”

The complaint also
claims that the Orrs “misrepresented” how they would use the
loan funds, noting that “the funds were not used for the purchase
of equipment and other items.” The development agreement states
the restaurant would use the funds to purchase a new heating and air conditioning
unit, restroom equipment and other items, including a counter, cases and
grill.

Locksley Orr called
this a lie and said that she and Guy Orr had used the loan funds for the
items listed in the development agreement.

Hill said that the
Village included the claim in the complaint in an effort to “investigate
the manner” in which the loan funds were spent.

Guy Orr said that
he and Locksley have a positive outlook for the next year. “We have
some different ideas that we’re going into 2004 with,” Guy
Orr said. “We expect to be here.”

“We offer something
that we think is not only for the community but I think it’s indicative
of what should be in Yellow Springs,” he added.